SIRIUSly Expensive: Satellite Radio Rates to Go Up

By  |  Wednesday, January 21, 2009 at 11:15 am

XM RadioSirius Buzz is reporting that merged satellite-radio monopolist Sirius XM is planning a price hike in March for…its best customers. The cost of getting satellite radio on additional devices beyond the first one you own go will apparently go up by $2 a month; in addition, the streaming Internet service that’s now free will cost $2.99 a month.

When the FCC approved Sirius and XM’s merger last year, it was famously based in part on promises of a three-year price freeze for service. That guarantee apparently applied only to the basic $12.95 a month charge, leaving Sirius XM able to jack up other prices associated with its service. With no direct competitor, there’s less pressure to keep prices low for fear the other guy will undercut them.

Well, maybe. Satellite radio is in dire danger of being rendered irrelevant over the next few years by cell phones that stream a bevy of music, news, and talk stations for no cost beyond standard monthly data fees. Already, my iPhone gets Pandora, Last.FM, Slacker, AOL Radio, NPR, and a whole lot more. The company’s betting that locking up exclusive rights to stuff like Howard Stern and major-league sports will keep its services attractive, but that sounds like an expensive proposition for everybody involved.

News about price changes comes a few months after Sirius XM sprung channel changes on its customers without warning, driving some of its most faithful customers bonkers. (Take a look at the comments on the story Ed Oswald wrote at the time.) I’m still getting used to the combined company’s substitution of something called SIRIUSly Sinatra for the old High Standards station I enjoyed, and really, it’s the prospect of the Red Sox in the spring more than anything else that’s keeping me from defecting to the Internet. And the company’s apparent intention to continue with two separate brands with similar-but-not-identical channel lineups is incredibly kludgy; it leaves DJs having to give two channel numbers each time their identify the station they’re on.

I was hooked on XM for years, and would love to see satellite remain a viable, appealing broadcasting option. But Sirius XM is in a tight spot, and while raising rates may help whip its shaky balance sheet into shape, you’ve gotta think that it’ll prompt some longtime customers–especially those who own iPhones–to dump it.

 
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12 Comments For This Post

  1. Ghop Says:

    I dumped Sirius two days ago. I have the iPhone and see no need to spend x amount of dollars a month in a service I was using less and less. I now use pandora and slacker. These offerings provide a better service than Sirius. I can customize stations to my liking and get a stream of music anywhere anytime. I can connect it to my car or take it out and connect it to my stereo. All of this for $0 dollars a month. In my opinion, Sirius is dead. If they want to stay viable, then they should start creating applications for mobile phones.

  2. Brian S Says:

    The devil’s in the details, apparently. In my case, I have a lifetime Sirius subscription for my car at the moment, and I’m using Last.FM for internet streaming. I was thinking about setting up streaming from their site to my home stereo as another option, but no longer…

  3. Ed Oswald Says:

    Am I wrong for being really upset about this? I really hope the FCC (or a complainant) seeks this to be blocked. It isn’t right. We were supposed to have NO rate increases for three years. We’re what, three months out of the gate!?

  4. George A Says:

    I was just thinking about dropping my second receiver’s subscription, b/c it’s in my wife’s car and she doesn’t use it much. And there’s no WAY I’m PAYING for the internet version. I like Stern, but not enough to pay extra for it. I’ll keep mine, especially if my new job has me in the car a lot (the original reason for getting it). Sirius needs to be careful. As mentioned above, the ever increasing alternatives could push it’s popularity to levels that would render it unsustainable from a business standpoint. Sirius, I like you, but you’re heading towards some awfully thin ice.

  5. Pat Barringer Says:

    Is it possible to listen to Pandora and/or Slacker on the iPod touch? What about the Blackberry Storm? I would really like to know.

    And by the way, the XM Online player really stinks. You can tell no one at that company really gives a crap anymore.

  6. Tim Sickler Says:

    Be reasonable guys the internet subscription will cost money. A 2nd radio will cost money. Even with your cell phone apps you will not be able to go coast to coast listening to them. This satellite radio is worth the money, with the cost of everything else going up do we not have more important things to bitch about.

  7. Russell Kirsner Says:

    OH HOWARD! I LOVE YOU! you KNOW ILL SPEND $3 a MONTH MORE TO STREAM YOU AT WORK!

    The Stock to a Sh*t in the bed…I bought at 2.80…now its not worth toilet paper.

    P.S. ARTIE IS FAT

  8. George Nelson Says:

    I will start canceling features until I get to the lowest cost possible. If that goes yup, I go back to listening to CD’s and regular radio (fm).

  9. Barry Says:

    I have 4 subscriptions. I called today and they told me that I was to also pay 2.99 for each subscription if I wanted the interent radio
    I will keep 1 subscription for one more year and see what happens.
    They really have given us the shaft. I guess the side that was saying they would raise prices was right. So much for 3 year freeze

  10. kevin mendelsohn Says:

    Consumers benefit from competition. GOOGLE provides lots of competition. Microsoft was there first, but never paid much attention to those areas. BA and Air France made sure that no-one else could operate Concorde planes, but at least they developed them jointly. I am very sad that SIRIUS was ALLOWED to buy out the competition and thus remove their public spectrum from us. NOT NICE.
    Anyway, I will continue base car use, but drop everything else. Attempts to be a monopoly are UN-American, and usually fail, but sometimes survive for years. Look at TICKETMASTER. TERRIBLE. What will happen as technology moves forward?

  11. Ken Link Says:

    I use Sirius in my vehicle, secondly on my boat. Boat use on the Great Lakes max. 5 months. Why do I pay for 12? I won’t pay an increase for the second receiver. I also will not pay (again) for Sirius on the internet when I’m not in the vehicle or on the boat.

    The question is ARE YOU LISTENING, SIRIUS?

  12. Chuck S Says:

    The FCC’s decision to allow the 2 companies to merge was a poor one and one that certainly would not benefit the consumer. It has not even been a year and these concerns are coming true.

    According to the FCC’s guidelines, there were certain conditions that were to be followed to allow the merger. One of them being that the pricing would not be raised for 36 months.

    Well as a subscriber to the Sirius I can tell you that they have used to loophole to skirt the provisions and effectively raised the prices, not once, but TWICE!

    In the first instance, the did not raise the prices on the primary units, but raised the prices $2 month for each additional unit. Today I get another notice from Sirius that they are now adding a “Royalty Fee” charge of $1.98 per month on primary units and .97 for additional units.

    Call it whatever you want, this is effectively 2 price increases in less than 6 months and is unacceptable. I would like Congress to look into this matter and propose legislation to prevent not only Sirius XM, but all companies from engaging in this deceptive behavior.

    Everywhere you look today, companies are engaging in deceptive practices and by raising prices and disguising them as additional fees and charges. This is standard practice on just about every rental car with concession recovery fees, battery fees, tire fees, license fees, etc. They are not the only ones, this practice is very common with hotels (resort fees) and now airlines are jumping into the fray.

    This has to stop. The price should be the price. The only thing that should be allowed to be added is any taxes and fees required by law.

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